--- title: "\"ASIC Giant\" Marvell Posts Record Quarterly Revenue, Raises Guidance Again; CEO Says Data Center Business Is \"On Fire\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/287836867.md" description: "Marvell's fiscal 2027 Q1 revenue hit a record high of $2.418 billion, and the company raised its fiscal 2027 revenue outlook to approximately $11.5 billion, both exceeding analyst expectations. The CEO stated that \"AI orders are exceptionally strong\" and \"data centers are on fire,\" confirming a target of over $10 billion for the custom chip business in fiscal 2029. The growth forecast for the interconnect business was raised from 50% to over 70%. Meanwhile, the company expanded its partnership with NVIDIA" datetime: "2026-05-28T01:03:27.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287836867.md) - [en](https://longbridge.com/en/news/287836867.md) - [zh-HK](https://longbridge.com/zh-HK/news/287836867.md) --- # "ASIC Giant" Marvell Posts Record Quarterly Revenue, Raises Guidance Again; CEO Says Data Center Business Is "On Fire" With record-breaking revenue and a significant upward revision in guidance, Marvell delivered a remarkably impressive performance. After the U.S. market close on May 27, Marvell, a leader in AI custom chips, optical communications, and data center interconnects, released its first-quarter fiscal 2027 earnings report and held a conference call. With the data center business continuing to explode, the company once again substantially raised its full-year guidance. CEO Matt Murphy stated directly on the call, "**Our data center business is on fire**" and "**orders are exceptionally strong.**" Marvell's revenue for Q1 of this fiscal year was $2.418 billion, up 28% year-over-year and 9% quarter-over-quarter, slightly beating the analyst expectation of $2.41 billion. Non-GAAP earnings per share (EPS) were $0.80, in line with analyst expectations. However, GAAP net income fell sharply to $34.5 million from $177.9 million in the same period last year, primarily due to one-time expenses and non-cash amortization related to the acquisitions of Celestial AI and XConn. The data center business contributed $1.83 billion in revenue, accounting for 76% of total revenue, representing a 27% year-over-year increase and an 11% quarter-over-quarter increase. Following the earnings report and conference call, the company's stock price dipped slightly by about 1%. Year-to-date, the stock had more than doubled before the earnings release. Amid such high expectations, merely "meeting expectations" may no longer be enough to impress the market. ## "AI-related orders are too strong," Marvell raises performance guidance again This marks several consecutive quarters of upward guidance revisions for Marvell. For fiscal 2027 Q2 guidance, the company expects revenue of approximately $2.7 billion (plus or minus 5%), a year-over-year increase of about 35%, higher than the previous analyst expectation of $2.6 billion. The non-GAAP EPS guidance range is $0.88 to $0.98, compared to the previous analyst expectation of $0.90. For the full-year guidance, Marvell raised its fiscal 2027 revenue outlook to approximately $11.5 billion, a year-over-year increase of about 40%. Three months ago, the company's guidance was "close to $11 billion." **Even more noteworthy is the outlook for fiscal 2028. Marvell raised its fiscal 2028 revenue target to approximately $16.5 billion, about $1.5 billion higher than the previous quarter's guidance, corresponding to a year-over-year increase of about 45%.** CEO Matt Murphy stated in the earnings release: "**We are seeing exceptionally strong AI-related orders, so we are significantly raising Marvell's revenue expectations for fiscal 2027 and fiscal 2028, representing a substantial improvement compared to the guidance provided last quarter.**" ## Data Center: Accounts for 76% of Total Revenue, Growth Accelerating Q1 data center revenue was $1.83 billion, up 27% year-over-year and 11% quarter-over-quarter, accounting for 76% of total revenue. Marvell's growth forecasts for this segment are: - FY2026: +46% (achieved) - FY2027: approx. +50% - FY2028: approx. +55% Murphy stated: > **The data center business is on fire. We expect revenue growth to accelerate this year and next, starting from an already high base.** ## Interconnect Business: Growth Rate Raised from 30% → 50% → 70%, CEO Says "There Is Still Upside Potential" The AI data center interconnect business is the largest component of Marvell's data center segment, covering product lines such as optical interconnects, DCI modules, and coherent optics. The annual growth expectation for this business has been raised consecutively over the past few quarters: it was around 30% around last September, then raised to 50%, and now raised again to over 70%. When pressed by analysts, Murphy stated directly: > I believe there is significant upside potential here. Our traditional DSP business will see a substantial leap next year, the 1.6T product line represents higher-value content, DCI is accelerating, and there are new businesses like retimers and AECs, as well as scale-up optics... This is the beginning of a major growth cycle for us. Why has the interconnect business suddenly become so important? Murphy provided clear logic: Early generative AI primarily addressed computing power and memory bottlenecks, with network interconnects being a secondary issue. However, with the deployment of more complex architectures such as inference models and Mixture of Experts (MoE), the volume of data transmission within AI clusters has increased dramatically, significantly boosting the importance of network interconnects. Key figures include: - TIA and driver chips: Expected to break through an annualized revenue scale of $1 billion in the coming quarters - DCI module business: Already supplying all five major U.S. hyperscale cloud providers; expected annualized revenue to exceed $1 billion in FY2028, roughly double that of FY2026 (approx. $500 million) - Scale-up optics (NPO/CPO optical interconnects): Previously expected to be around $150 million, now raised, with FY2028 expected to exceed $300 million ## Custom Chips (XPU): Doubling Next Year, FY2029 Target Exceeds $10 Billion Marvell's custom chip business (Custom/XPU) is another important growth line and one of the market's most closely watched areas. **Current Progress:** - FY2027 custom chip revenue: Year-over-year increase of over 20% - FY2028 custom chip revenue: Expected to double year-over-year, higher than the previous quarter's expectation - FY2029 target: Exceeding $10 billion (previous target was approx. $8 billion) Analyst Vivek Arya (Bank of America Securities) asked during the conference call: Does this mean FY2028 custom chip revenue will be over $4 billion, then jump to $10 billion in FY2029, implying a single-year incremental increase of over $5 to $6 billion? Murphy's response was: **Yes, you heard correctly.** Three major drivers for custom chip growth in FY2028: 1. Continued growth of existing flagship XPU projects 2. More than 10 affiliated XPU projects (NIC, CXL, etc.) entering higher-volume production stages, with demand consistently exceeding expectations 3. A new leading XPU project entering mass production—Murphy stated, "Everything is progressing smoothly with the project, and the full-year production plan is secured." Murphy also revealed that although newly won design orders typically require about a two-year development cycle before contributing to revenue, the significance of these projects lies in securing longer-term growth, which he referred to as an "insurance policy." ## Expanded Partnership with NVIDIA, Implementation in Three Key Areas This quarter, Marvell announced an expanded strategic partnership with NVIDIA. Murphy detailed three core directions during the conference call: **1\. Optical Interconnect Collaboration**: Marvell has long provided DSPs, TIAs, and drivers to NVIDIA. The two parties are now further collaborating to develop silicon photonics technology, considered a key enabling technology for scale-up networks. **2\. NVLink Fusion Integration**: Allows Marvell to build custom chips and network semiconductors that seamlessly interface with NVIDIA infrastructure. Murphy stated that this provides greater flexibility for hyperscale cloud providers to freely mix and match custom chips and NVIDIA chips. "Marvell uniquely provides a bridge between these two architectures," creating new market opportunities for both parties. **3\. AI-RAN**: Marvell will enhance its Octeon base station processors to work directly in synergy with NVIDIA GPUs, running 5G/6G wireless workloads and AI applications simultaneously on the same hardware platform. ## Supply Chain: Locking in Capacity Early, Approximately $1 Billion in Prepayments This Year Facing continuously rising demand, supply chain management has become a key variable. CFO Willem Meintjes revealed during the conference call that the company plans to make approximately $1 billion in supplier prepayments in fiscal 2027, with the first batch of payments starting in Q2. These prepayments will be credited against future material purchases. COO Chris Koopmans explained Marvell's supply chain strategy in response to analyst questions: > **Everything related to AI has been supply-constrained from start to finish. Our approach is to build very close relationships with a few core suppliers, provide them with five-year demand forecasts, fulfill our commitments every time, and support our forecasts with concrete actions and prepayments.** On the financial front, operating cash flow reached a record $639 million in Q1. The company repurchased $200 million worth of stock and paid $54 million in dividends during the quarter. As of the end of Q1, total debt stood at $4.96 billion, with a net debt/EBITDA ratio of 0.32x. ### Related Stocks - [MRVL.US](https://longbridge.com/en/quote/MRVL.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [MVLL.US](https://longbridge.com/en/quote/MVLL.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [XLK.US](https://longbridge.com/en/quote/XLK.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [BAC.US](https://longbridge.com/en/quote/BAC.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) - [BAC-Q.US](https://longbridge.com/en/quote/BAC-Q.US.md) - [BML-L.US](https://longbridge.com/en/quote/BML-L.US.md) - [BAC-L.US](https://longbridge.com/en/quote/BAC-L.US.md) - [BAC-K.US](https://longbridge.com/en/quote/BAC-K.US.md) - [BML-H.US](https://longbridge.com/en/quote/BML-H.US.md) - [BAC-N.US](https://longbridge.com/en/quote/BAC-N.US.md) - [BAC-E.US](https://longbridge.com/en/quote/BAC-E.US.md) - [MER-K.US](https://longbridge.com/en/quote/MER-K.US.md) - [BAC-O.US](https://longbridge.com/en/quote/BAC-O.US.md) - [BML-G.US](https://longbridge.com/en/quote/BML-G.US.md) - [BAC-M.US](https://longbridge.com/en/quote/BAC-M.US.md) - [BAC-B.US](https://longbridge.com/en/quote/BAC-B.US.md) - [BML-J.US](https://longbridge.com/en/quote/BML-J.US.md) - [BAC-S.US](https://longbridge.com/en/quote/BAC-S.US.md) - [BAC-P.US](https://longbridge.com/en/quote/BAC-P.US.md) - [8648.JP](https://longbridge.com/en/quote/8648.JP.md) ## Related News & Research - [Options data reveals where Marvell stock will head after Q1 earnings](https://longbridge.com/en/news/287803928.md) - [World Investment Advisors Has $5.75 Million Stock Holdings in Marvell Technology, Inc. $MRVL](https://longbridge.com/en/news/287909969.md) - [Marvell Technology (NASDAQ:MRVL) Issues Quarterly Earnings Results, Meets Estimates](https://longbridge.com/en/news/287818775.md) - [Marvell sees custom chip revenue topping $10 billion by 2029 as AI demand grows](https://longbridge.com/en/news/287829109.md) - [Does Marvell (MRVL) Keeping a Combined Chair-CEO Clarify or Complicate Its AI Investment Story?](https://longbridge.com/en/news/287602871.md)